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Daily Business Report-Dec. 9, 2015

Companies Eager to Bid on Navy

Drone that Operates from Carrier

Northrop Grumman, General Atomics, Lockheed Martin and Boeing are among the companies that are preparing to bid for a new unmanned armed aircraft for launch from a Navy carrier at sea, according to a Reuters report

U.S. Chief of Naval of Operations Adm. John Richardson has pushed for speedy progress in that effort.

Richardson believes the Unmanned Carrier-Launched Airborne Surveillance and Strike program is the way forward for the Navy to develop a drone that operates from a carrier.

“That’s a prime candidate for trying to get something out there… so that we can learn how to operate an unmanned aerial vehicle from a carrier,” Richardson told a U.S. Naval Institute event.

He said the Navy and Navy Secretary Ray Mabus are eager to move forward with unmanned vehicles built for the air, the surface and underwater missions, according to the report.

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San Diego’s Dermala Inc. Wins

Local InnovateHER Competition

Dermala Inc., an early-stage biotech company based in San Diego, has won the local InnovateHER competition hosted by CONNECT and Hera Labs. The firm now goes to the national competition sponsored by the U.S. Small Business Administration and Microsoft on March 17 in Washington, D.C.

Lada Rasochova, CEO and president of Dermala

The winning company will take home $40,000.

“It is an honor to be among the semi-finalists in the InnovateHER competition, and I’m grateful for the opportunity to showcase Dermala alongside other companies that are making a difference in the lives of women all over the world,” said Lada Rasochova, CEO and president of Dermala. “Being a female in male-dominated industry is one thing, but to be leading the charge in positively impacting other women’s lives is truly inspiring.”

Dermala was selected based on its measurable impact on the lives of women and families, potential for commercialization and its ability to fill a need in the marketplace.

Founded in 2014 by Rasochova and Eric Huang, professor at the Department of Dermatology at UC San Diego, Dermala is an early stage biotechnology company that uses the human microbiome to develop treatments for chronic skin diseases. Rasochova has been involved in commercialization of pharmaceutical and biotechnology products for the past 20 years. She spent more than 15 years in the private sector where she held various leadership and management positions, most recently as the R&D leader and director of new business development in a division of the Dow Chemical Company.

Judges of the local challenge were local business leaders Silvia Mah, CEO of Hera-Labs; Kim Davis King, adjunct professor at San Diego State, former venture capitalist and current angel investor; and Sergio Gurrier, board director, Tech Coast Angels.

European Union Starts Anti-Trust

Action Against Qualcomm

City News Service

Trade regulators in Europe accused San Diego-based mobile device chipmaker Qualcomm Tuesday of illegally paying a major customer for exclusive use of its chipsets, and selling chipsets below cost with the aim of forcing a competitor out of the market.

The Brussels, Belgium-based European Commission issued two Statements of Objection, which outline the allegations and give Qualcomm an opportunity to respond.

Qualcomm acknowledged that it’s under investigation by authorities in Europe and also Taiwan, and said it is cooperating.

According to a statement from Qualcomm, the European Commission is looking into the supply of Qualcomm’s chipsets to a single customer under an existing agreement, and the company’s sales to two customers from 2009 through 2011 of three chipsets incorporated into dongles — small USB devices that at the time were used to provide cellular connectivity for laptops.

“Qualcomm has been cooperating with the commission since the outset of these matters, and now that we’ve received the Statements of Objections, we welcome the chance to formally respond,” said Qualcomm general counsel and executive vice president Don Rosenberg.

“We look forward to demonstrating that competition in the sale of wireless chips has been and remains strong and dynamic, and that Qualcomm’s sales practices have always complied with European competition law,” he said.

Company officials have three months to respond to one of the accusations and four for the other.

“I am concerned that Qualcomm’s actions may have pushed out competitors or prevented them from competing,” said Margrethe Vestager, the EU Commissioner in charge of competition policy. “We need to make sure that European consumers continue to benefit from competition and innovation in an area which is at the heart of today’s economy.”

The commission’s statement said it opened two formal investigations in July “to assess concerns that Qualcomm may have abused a dominant position in the area of baseband chipsets through two separate conducts.”

Separately, the Taiwan Fair Trade Commission has requested information from Qualcomm and launched an investigation into whether the company’s patent licensing arrangements violate the Taiwan Fair Trade Act, the company reported. Qualcomm said it believes it complies with the law.

The Kensington Café benefited from the Storefront Improvement Program

More Businesses Can Now Qualify

For Storefront Improvement Program

The city of San Diego’s Storefront Improvement Program will soon be available to more small businesses, thanks to changes approved by the City Council.

The program revitalizes building facades visible to customers, neighboring merchants and residents. The city provides design assistance and financial incentives to small business owners who wish to make a creative change to their storefronts.

After celebrating several successful improvements achieved through the program in District 3, Councilman Todd Gloria proposed changes in April to ensure more businesses could take advantage of the opportunity.

“Many businesses in my district have successfully utilized this program, which has not only added to the character of the streetscapes, but also brings new investment into the community,” said Gloria. “The changes approved today will help make ensure the Storefront Improvement Program is more fully utilized.”

One revision increases the eligibility threshold to enable small businesses with up to 25 employees to participate. Currently, the policy limits eligibility to businesses with 12 or fewer employees. Other changes are designed to reduce confusion about ineligible businesses and to eliminate the public art incentive category since it has been underutilized and the city has other mechanisms to encourage public art.

The revisions include another incentive category to rebate a portion of project costs related to permitting, which should encourage more projects to follow through to completion.

“I am grateful to the Economic Development Department staff for developing these sensible changes that will help fuel greater investment in neighborhoods throughout our city,” said Gloria.

Three Piper Ranch

Three Piper Ranch Sold for $3.1 Million

Three Piper Ranch in Otay Mesa, a two-building industrial park at 1210 and 1320 Air Wing Road, has been sold for $31.5 million to an affiliate of Zurich Alternative Asset Management LLC. The property was 100 percent leased at the time of the sale.

The seller was a fund managed by Black Rock. The property’s four tenants are CamelBak, ILG Corporation, Legacy Supply Chain Services, and AEMI.

CBRE and Cushman & Wakefield represented the Black Rock managed fund.

San Diego Councial Approves New

$37M Contract with City Employees

City News Service

A four-year contract approved Tuesday by the City Council for many city of San Diego employees includes 3.3 percent pay raises in each of the final two fiscal years.

The agreement, which the 4,000 or so members of the Municipal Employees Association ratified in October, is expected to cost the city $37.7 million total.

Other provisions include pay hikes of 5-7 percent for employees in two dozen classifications with recruiting and retention problems in the fiscal year that begins in July 2018; improvements to flexible benefits; higher uniform allowances; a doubling of tuition reimbursements to $2,000; and increasing discretionary leave from eight to 24 hours. It also adds in-laws, grandparents and grandchildren to the city’s bereavement policy.

A provision that would provide 160 hours of parental leave has not been finalized, according to city staff.

“For a decade now, employees have made significant financial sacrifices and concessions, and those sacrifices and concessions helped this city survive the financial crisis and the Great Recession,” said Michael Zucchet, general manager of the MEA, which for the most part represents the city’s white- collar workers.

He said the San Diego’s relatively strong fiscal footing today stems partially from the pay and benefit cuts accepted by employees when the city’s finances were in turmoil.

“This contract represents a welcome change from that last decade, and a sort of turning of the corner, and it’s significant,” Zucchet said.

The council on Tuesday also approved an agreement in which Civic San Diego will open exclusive negotiations with a developer that plans to bring a Ritz Carlton hotel, Whole Foods grocery store and affordable housing units to Seventh Avenue and Market Street. Civic San Diego handles development issues on behalf of the city.

Union officials who represent hotel workers tried to get the council to impose a condition that the tenants pay a “living wage,” which is $12.02 an hour if employees receive benefits. Their bid failed when the City Attorney’s Office said the council didn’t have such authority.

Ritz Carlton executives recently sent a letter to city officials that said they planned to pay at or above living wages to non-tipped employees, anyway.

The 76-unit apartment complex is at left in this rendering by Rodriguez+Associates Architects and Planners. A 118-unit multi-family building is on the right.

City Council Votes to Help Finance

76-Unit Apartment Complex for Seniors

The San Diego City Council voted unanimously Tuesday to help finance what will be the city’s first LGBT-affirming senior community, a development proposed by Community Housing Works that will be located at Texas Street and Howard Avenue in North Park.

Attending the City Council meeting, from left, are: Delores Jacobs, CEO of San Diego LGBT Community Center, Sue Reynolds, president and CEO of Community HousingWorks, and LGBT senior Robert Bettinger at Tuesday’s City Council meeting.

“There is a tremendous need for this community, which is going to serve as a model for future senior communities that will provide welcoming homes and support for LGBT pioneers,” said Sue Reynolds, president and CEO of Community HousingWorks. “This transit-oriented, pedestrian-friendly location in North Park means these seniors will be living in a cutting-edge infill development, close to shopping, the new Bus Rapid Transit, medical centers and opposite a proposed 118-unit market rate apartment complex.”

Delores Jacobs, CEO of San Diego LGBT Community Center, said: “The people who will live here paved the way for younger LGBT generations, and many of them are forced back into the closet in traditional senior communities because of a lack of acceptance. We owe this new community and more to San Diego’s LGBT seniors.”

The 76-unit affordable housing community will be open to all seniors, but CHW intends to create an environment welcoming LGBT seniors who have challenges finding LGBT-affirming housing

CHW would develop the new community and partner with the San Diego LGBT Community Center to provide onsite supportive services. CHW is a non-profit San Diego-based developer that builds, revitalizes and operates affordable housing communities.

The city of San Diego and the San Diego Housing Commission are providing $7 million for the $27 apartment complex, which is expected to take about 18 months to build.

“This project is a first step. Our goal must be that all senior housing options become open and affirming,” said Councilman Todd Gloria. “LGBT seniors should have the same opportunity to find apartment homes in communities with onsite supportive services.”

Illumina Invests in 4 Startups

Through Illumina Accelerator

San Diego-based Illumina Inc. announced that it has invested in four startups through Illumina Accelerator.

“Illumina Accelerator is pleased to have such a promising group of startups join our growing genomics community,” said Mostafa Ronaghi, Illumina’s senior vice president, chief technology officer and co-founder of Illumina Accelerator. “We’re here to provide access to our best-in-class sequencers, a support team of genomics professionals and entrepreneurial coaches, and the tools each of these startups need to advance breakthrough applications in genomics.”

The selected startups for the third funding cycle are:

• MetaMixis Inc., a synthetic biology company spun out of The University of British Columbia, is specializing in the rapid discovery of enzymes and pathways to produce bio-based materials and chemicals.

• NextGen Jane Inc., a novel med-tech company based on technology developed at Harvard University, is offering women insights into their reproductive health through a genomics-driven approach to tracking biological changes predictive of disease.

• Skinomics Inc., a skin microbiome company formed by faculty members from the University of California, Los Angeles, is harnessing genomics information from the cutaneous microbiome to create advances in skin care, with a current focus on acne.

Personnel Announcements

Levi Silver Joins Solomon Ward Law Firm

Levi Silver

Levi Y. Silver has joined Solomon Ward Seidenwurn & Smith as of counsel.

Silver joins the firm’s business litigation practice group. His practice emphasizes complex litigation, with a particular focus on business, commercial, securities, and shareholder disputes. Silver represents businesses and individuals in state and federal courts, at both the trial and appellate court levels.

Before joining Solomon Ward, Silver was an associate with Skadden, Arps, Slate, Meagher & Flom LLP in New York, and then moved to San Diego where he opened and ran his own practice, Silver Law Offices.

Silver received his J.D. from Columbia University School of Law, and his B.A. from Brooklyn College.

Sunrise Management Adds 2 to Management Team

Marc Corless

Dan Poteet

San Diego-based Sunrise Management, which specializes in the management of multifamily properties, has added to its executive team, naming Marc Corless director of human resources and Dan Poteet, director of information systems.

Corless was most recently vice president of human resources for WIS International, while Poteet joins Sunrise after serving as the vice president of information technology for the Greater San Diego Association of Realtors.

With a 30-year background in corporate human resources, Corless has also held executive level positions with Petco Animal Supplies, Liquid Investments and Cipher Data Products.

Poteet will manage and direct all technology and business operations for Sunrise, establishing an information technology systems plan and vision for both internal and external operations. Poteet has held senior-level IT positions for a wide range of companies, among them Infor Software and FFF Enterprises, and also ran an information technology consulting business for many years.

Lauren Slatinsky Joins Pacific Building Group

Lauren Slatinsky

Pacific Building Group has named Lauren Slatinsky as director of business development.

In her new role, Slatinsky is working with the firm’s preconstruction and operations teams to provide owners, managers, brokers and design teams with pricing and scheduling. Slatinsky is focused on serving and growing the firm’s primary markets, which include corporate office, health care, life science and industrial.

Before joining Pacific Building Group, Slatinsky was the business development manager at BNBuilders for more than four years. She also worked for Turner Construction and Rudolph and Sletten. She is a

communication studies graduate of University of San Diego.

Scripps Health Hires Chief Information Officer

Andy Crowder

Scripps Health has hired Andy Crowder as its new chief information officer and corporate senior vice president. Crowder comes to Scripps from MaineHealth, where he served as senior vice president and chief information officer. He will start on Jan. 18.

Crowder has almost 30 years of IT experience. In addition to his work at MaineHealth, a not-for-profit integrated health care delivery network with 11 hospitals and 17,000 employees, Crowder served as CIO for Florida Hospital and Adventist Health System. He has deep implementation experience, including leading the successful Epic implementation at MaineHealth.

Scripps is working with Epic now on system design of its integrated enterprise electronic health record (EHR) system, with implementation planned to begin in mid-2017. The new system will replace Scripps’ current ambulatory and inpatient EHRs and revenue cycle management system.

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We Want Your Opinions on San Diego’s Big Issues
In the coming months, Probosky Research (one of California’s leading opinion research firms) will continue its partnership with SD METRO to survey San Diego residents about topics of interest to our readers. We’d like to throw open the door for suggestions for topics. What do you want to know? What do you think you know, but aren’t sure? What are you certain you know, but want to prove it beyond doubt? Ideally, we’d like to see questions that have to do with public policy.
Some areas may include Mayor Filner’s first 100 days job performance, should the city be responsible for economic growth and the creation of new jobs, how important are infrastructure improvements to our daily lives (streets and bridges, etc.), how important is water independence, how satisfied are residents with public transit or how do city residents value Balboa Park and other open spaces? Do you believe the City Council should revive the Plaza de Panama plan for Balboa Park?
You can email Probolsky Research directly with your ideas: info@probolskyresearch.com